Tej Singh Verma And Anr vs Bhopal Sahakari Dugdha Sangh Maryadit And Ors

The present petition has been filed by the Petitioner herein aggrieved by the order dated 12/07/18 ( Annexure P/8) and order dated 04/08/18 ( Annexure P-13) whereby the petitioner has been blacklisted by the respondents herein. The petitioner entered into an agreement with the respondents by which he was supposed to supply trucks for the transportation of milk.

Learned counsel for the petitioner has drawn the attention of this court to Annexure P/8 at page-50 of the petition, which is the first order dated 12/07/18 impugned by the petitioner. By the said order, the respondents communicated to the petitioner that as per the agreement between the petitioner and the respondents, the vehicle owned by the petitioner, a tanker for transportation of milk, bearing No. MP04-GA-8877, was to be placed in the service of the respondents till 31/03/19. According to the respondents, during the period of the agreement itself, the petitioner has sold the said tanker to someone else. Under the circumstances, by the letter dared 12/07/18, the petitioner was rendered ineligible for a period of three years from entering into an agreement with the respondents for transportation of milk.

Thereafter, the learned counsel for the petitioner has drawn the attention of this court to the letter dated 15/06/18 addressed by the respondents to the petitioner to the effect that the tanker bearing No. MP 09-HG-2962 owned the petitioner was placed in the services of the respondents by way of an agreement, is stated to have strayed from the designated route which resulted in vehicle being seized by the police authorities and the GPS System was also switched off preventing the tracking of the vehicle by the respondents. Thereafter, the respondents required the petitioner to give a response within 48 hours, as to why the use of the tankers owned by the petitioner ought not be cancelled by the respondents as the petitioner was allegedly working in contravention of the conditions of the agreement.

Thereafter, the second impugned order dated 04/08/18 was passed by the respondents where besides cancelling the agreement with the petitioner for the use of the vehicles for the transportation of milk, the petitioner was also blacklisted by the respondents. The order of blacklisting is not for a specific period but appears to be one in perpetuity. The learned counsel for the petitioner has submitted that the said orders are bad in law as no notice was issued to the petitioner before the blacklisting was done. The fact that no notice was issued by the respondents to the petitioner affording him an opportunity to explain his position, is not disputed by the learned counsel for the respondents. However, learned counsel for the respondents has drawn the attention of this Court to page-27 of the petition, which is the conditions governing the parties to the agreement. Learned counsel for the respondents has drawn the attention of this Court to Clause-7 of the agreement whereby it was provided :-

"नियमों का उल्लंघन एवं अन्य अनियमितताओं की दषा में संबंधित नंबर के टैंकर तथा परिवहनकर्ता दोनों को ब्लेक लिस्ट किया जावेगा, उसे देष प्रदेष के अन्य दुग्ध संघों में भी परिवहन कार्य नहीं दिया जा सकेगा। जिसकी सूचना अन्य दुग्ध संघों को तत्काल दे दी जावेगी। "

According to the learned counsel for the respondents, Clause-7 of the terms and conditions made the petitioner aware of the circumstances in which, he could be blacklisted, it obviated the necessity of issuing a notice, prior to blacklisting. He has also drawn the attention of this Court to Clause-41 of the agreement, as per which, the petitioner ought to have opted for arbitration if he was of the view that there arose a dispute between him and the respondents.

Heard the learned counsel for the parties and perused the documents filed therewith. Learned counsel for the petitioner has placed before this Court the Judgment of Hon'ble the Supreme Court in the case of Gorkha Security Services Vs. Government ( NCT of Delhi ) and others (2014) 9 SCC 105, In a near identical case, where the petitioner Gorkha Security Services is blacklisted without any notice being issued. The Supreme Court set aside the said order. While doing so, the Supreme Court observed in paragraph 16 that it is a trite law that blacklisting has to be preceded by a show-cause notice. It further held that there is no miasma with regard to the said proposition of law and that it is firmly grounded and does not even demand much amplification.

According to the Hon'ble Supreme Court, the necessity of compliance with the principles of natural justice by giving an opportunity to the person against whom the proposed action of blacklisting is sought to be taken, has a valid and solid rationale behind it. It observed that blacklisting is a " Civil Death" of a person who is burdened with an order of blacklisting and that the same is stigmatic and debars a person from participating in government tenders. The Supreme Court in paragraph-17 has referred to another judgment of the Supreme Court reported in Erusian Equipment & Chemicals Ltd. Vs. State of W,B ( 1975) 1 SCC 70, wherein the Supreme Court has held that the State has a duty to observe equality and cannot choose to exclude persons by discrimination. It further held that the order of blacklisting has the effect of depriving a person of equal opportunity in matters relate to government contracts. In paragraph-20 of the judgement, in Erusian Equipment (supra), the Supreme Court held that blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful contractual relationship with the government for the purposes of gain. It further held that the fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put on a blacklist.

Learned counsel for the respondents has referred to judgment of the Division Bench of this Court in the case of UNC Tech. Private Limited Vs. Food Corporation of India passed in WP No. 2778/19, whereby the learned Division Bench of this Court had held that in the matters relating to contractual relationship between the State and the individual, the Court ought not to go beyond the covenants in the agreement governing the parties. Learned counsel for the respondents has also submitted that this is also a case of blacklisting, in which the Division Bench has refused to interfere. However, the fact of that case reveals that before blacklisting was done, a notice was issued to the effected party, who was given an opportunity to represent against the proposed move.

Under the circumstances, the factual aspects are completely different in this particular case. As in this case, has already stated hereinabove, it is undisputed that no notice has been issued to the petitioner before the impugned orders of blacklisting have been passed.

Under the circumstances, the petition succeeds and the impugned orders dated 12-07-2018 and 04-08-2018 are quashed. However, the respondents are at liberty to start the blacklisting of the petitioner afresh after following due process. With the above, the petition is finally disposed of.